2014 Pre-owned Jet Sales Set Records and Continue to Grow

2014 continued to be a buyer’s market for pre-owned business jets. Even so, according to data from JetNet, used business-jet inventories in December 2014 dropped to 11% — their lowest point since 2007 and a 1.5% decline year over year, as reported by AINonline.

The year-over-year retail transactions for used business jets surged by over 8% in December, hitting a new record of 2,569 pre-owned jets. However, the average asking price for pre-owned business jets continued to slide by over 10%.

While the number of in-operation business jets has continued to grow over the past several years, up until last year, pre-owned aircraft inventories had remained fairly stable, declining by less than one percentage point per year between 2011 and 2013, as reported by JETNET. The significant drop in pre-owned inventories bodes health for the market overall.

Pre-owned Gulfstream models a good buy

In the wake of Gulfstream’s delivery of its G650 to a waiting list of wealthy buyers, quite a few G550s are now for sale. CNBC reports that more than 30 used Gulfstream G550s are currently for sale, up from 11 a year ago. A 2006 G550 can be purchased for less than $30 million, around 60% of its original retail value. With the increase in G550 inventories, prices could fall even lower, possibly enabling individuals or business that previously couldn’t afford a private jet to do so.

Sales of older airplanes have typically been cash only, with models priced far below market value. For example, Gulfstream’s GIV models, originally priced at $36 million in 1998, now sell for $3 to $4 million. Financing for these older models has been almost nonexistent. However, recently some financial institutions have started offering aircraft loans, including financing for older aircraft, reports Business Jet Traveler.

If you are a jet owner and considering upgrading your current business jet to a newer model, now appears to be a favorable time to sell — before a flood of pre-owned jets hits the market and drives down values.